Le Lézard
Classified in: Business, Covid-19 virus
Subjects: ERN, ERP, DIV, BFA

STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022


Delivers Double-Digit 2Q 2022 Revenue Growth; Reiterates guidance driven by global media performance and continued digital acceleration

NEW YORK, Aug. 4, 2022 /PRNewswire/ -- (NASDAQ: STGW) -- Stagwell Inc. ("Stagwell") today announced financial results for the three and six months ended June 30, 2022.

SECOND QUARTER AND YTD HIGHLIGHTS:

"Stagwell is executing exactly as we said we would, and doing so profitably. We delivered significant organic net revenue growth of 16% in the second quarter, which has the toughest comparisons of the year. Our high-growth digital capabilities expanded to 57% of net revenue and grew 28% organically versus the prior year period. Due to our unique mix of digital and creative capabilities, clients now recognize Stagwell as a serious alternative to legacy incumbents ? and we are now a regular contender in many of the largest global pitches," said Mark Penn, Chairman and Chief Executive Officer of Stagwell. "Our disciplined financial management and strong cost controls allow us to maintain leading margins, even while making smart investments in our corporate infrastructure to scale the network. We are optimistic about the back half of the year as our world-class advocacy businesses prepare for a record cycle of US political advertising spend and our year-over-year comparisons ease. We remain very confident in our full-year guidance of 18-22% organic net revenue growth and $450-$480 million of adjusted EBITDA."

"Stagwell is executing exactly as we said we would, and doing so profitably," said Mark Penn, Chairman, CEO, Stagwell.

Frank Lanuto, Chief Financial Officer, commented: "The Company reported strong second quarter results with GAAP revenue of $673 million, net revenue of $556 million and Adjusted EBITDA of $111 million. Pro forma organic net revenue increased 16% over the prior period and Adjusted EBITDA margins remained strong at 20% of net revenue as we remain diligent around cost controls. Our balance sheet is in a good position and should benefit as we head into the seasonally strong back half of the year when we expect cash flow to increase significantly."

Financial Outlook

2022 financial guidance is as follows:

 

* The Company has excluded a quantitative reconciliation with respect to the Company's 2022 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.

Conference Call

Management will host a video webcast and conference call on Thursday, August 4, 2022, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and six months ended June 30, 2022.  The video webcast will be accessible at https://bit.ly/STGWEarningsQ2. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the conference call.

A recording of the conference call will be accessible one hour after the call and available for ninety days at www.stagwellglobal.com.

Stagwell Inc.

Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing.  Led by entrepreneurs, our 13,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Basis of Presentation

The acquisition of MDC Partners (MDC) by Stagwell Marketing Group (SMG) was completed on August 2, 2021. The results of MDC are included within the Statements of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entirety of all periods presented.

Non-GAAP Financial Measures

In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures."  Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:

Pro Forma Results: The Pro Forma amounts presented for each period were prepared by combining the historical standalone statements of operations for each of legacy MDC and SMG. The unaudited pro forma results are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or consolidated financial condition would have been had the combination actually occurred on the date indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The Company has excluded a quantitative reconciliation of adjusted Pro Forma EBITDA to net income under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K.

(1) Organic Revenue: "Organic revenue growth" and "organic revenue decline" refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) "non-GAAP acquisitions (dispositions), net". Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) Free Cash Flow:  defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments.

(5) Financial Guidance:  The Company provides guidance on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company's beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as "estimates", "expects", "contemplates", "will", "anticipates", "projects", "plans", "intends", "believes", "forecasts", "may", "should", and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section.  Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:

Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in our 2021 Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on March 17, 2022, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," and in the Company's other SEC filings.

CONTACTS:















For Investors:



For Media:



Michaela Pewarski



Beth Sidhu



(646) 429-1812



(202) 423-4414



[email protected]



[email protected]










 

SCHEDULE 1
STAGWELL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands)



Three Months

Ended June 30,


Six Months

Ended June 30,


2022


2021


2022


2021

Revenue

$        672,913


$        209,560


$     1,315,816


$        390,802

Operating Expenses








Cost of services

424,661


122,074


836,631


234,073

Office and general expenses

165,423


52,674


309,935


104,952

Depreciation and amortization

32,231


10,381


63,435


21,331

Impairment and other losses

2,266


?


2,823


?


624,581


185,129


1,212,824


360,356

Operating Income

48,332


24,431


102,992


30,446

Other income (expenses):








Interest expense, net

(18,151)


(1,935)


(36,880)


(3,286)

Foreign exchange, net

70


(385)


(236)


(1,062)

Other, net

(121)


(101)


35


1,184


(18,202)


(2,421)


(37,081)


(3,164)

Income before income taxes and equity in earnings of non-consolidated affiliates

30,130


22,010


65,911


27,282

Income tax expense

5,421


3,348


8,610


4,021

Income before equity in earnings of non-consolidated affiliates

24,709


18,662


57,301


23,261

Equity in income (loss) of non-consolidated affiliates

(190)


(3)


840


1

Net income

24,519


18,659


58,141


23,262

Net income attributable to noncontrolling and redeemable noncontrolling interests

(14,056)


(1,314)


(35,003)


(1,552)

Net income attributable to Stagwell Inc. common shareholders

$          10,463


$          17,345


$          23,138


$          21,710

Income Per Common Share:








Basic








Net income attributable to Stagwell Inc. common shareholders

$               0.08


N/A


$               0.19


N/A

Diluted








Net income attributable to Stagwell Inc. common shareholders

$               0.08


N/A


$               0.18


N/A

Weighted Average Number of Common Shares Outstanding:








Basic

126,425


N/A


124,367


N/A

Diluted

296,414


N/A


298,843


N/A

 

SCHEDULE 2
STAGWELL INC.
UNAUDITED PRO FORMA COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)





Net Revenue - Components of Change






Change


Three Months
Ended June
30, 2021


Foreign
Currency


Net
Acquisitions
(Divestitures)


Organic


Total Change


Three Months
Ended June
30, 2022


Organic


Total







Integrated Agencies Network

$        289,065


$          (2,597)


$           1,370


$         27,004


$         25,777


$       314,842


9.3 %


8.9 %

Media Network

129,195


(3,633)


10,010


36,303


42,680


171875


28.1 %


33.0 %

Communications Network

52,328


(292)


302


14,582


14,592


66920


27.9 %


27.9 %

All Other

9,623


(96)


(5,694)


(1,154)


(6,944)


2,679


(12.0) %


(72.2) %


$        480,211


$          (6,618)


$           5,988


$         76,735


$         76,105


$       556,316


16.0 %


15.8 %










Net Revenue - Components of Change






Change


Six Months
Ended June
30, 2021


Foreign
Currency


Net
Acquisitions
(Divestitures)


Organic


Total Change


Six Months
Ended June
30, 2022


Organic


Total







Integrated Agencies Network

$        543,371


$          (3,718)


$           1,370


$         79,413


$         77,065


$       620,436


14.6 %


14.2 %

Media Network

250,277


(4,879)


14,217


67,741


77,079


327356


27.1 %


30.8 %

Communications Network

99,859


(388)


302


29,599


29,513


129372


29.6 %


29.6 %

All Other

15,485


(107)


(10,950)


1,361


(9,696)


5,789


8.8 %


(62.6) %


$        908,992


$          (9,092)


$           4,939


$       178,114


$       173,961


$    1,082,953


19.6 %


19.1 %


Note: Due to changes in the Company's internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments.

 

SCHEDULE 3
STAGWELL INC.
UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS
(amounts in thousands)


For the Three Months Ended June 30, 2022



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$     314,842


$     171,875


$                   66,920


$         2,679


$               ?


$     556,316

Billable costs

63,326


22,421


30,850


?


?


116,597

Revenue

378,168


194,296


97,770


2,679


?


672,913













Billable costs

63,326


22,421


30,850


?


?


116,597

Staff costs

195,942


102,285


42,014


2,664


6,563


349,468

Administrative costs

31,465


24,001


7,520


493


2,870


66,349

Unbillable and other costs, net

17,128


11,890


155


7


?


29,180

Adjusted EBITDA (1)

70,307


33,699


17,231


(485)


(9,433)


111,319













Stock-based compensation

4,663


4,969


649


?


2,850


13,131

Depreciation and amortization

18,010


8,643


2,524


750


2,304


32,231

Deferred acquisition consideration

6,181


3,773


3,518


?


?


13,472

Impairment and other losses

784


?


?


1,482


?


2,266

Other items, net (1)

751


1,449


44


22


(379)


1,887

Operating income (loss)

$       39,918


$       14,865


$                   10,496


$        (2,739)


$      (14,208)


$       48,332


(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Due to changes in the Company's internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments.

 

SCHEDULE 4
STAGWELL INC.
UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS
(amounts in thousands)


For the Six Months Ended June 30, 2022



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$    620,436


$    327,356


$               129,372


$         5,789


$              ?


$ 1,082,953

Billable costs

108,203


64,727


59,933


?


?


232,863

Revenue

728,639


392,083


189,305


5,789


?


1,315,816













Billable costs

108,203


64,727


59,933


?


?


232,863

Staff costs

389,242


198,308


81,637


5,200


15,719


690,106

Administrative costs

57,297


41,042


14,364


1,188


8,752


122,643

Unbillable and other costs, net

34,201


23,059


203


10


?


57,473

Adjusted EBITDA (1)

139,696


64,947


33,168


(609)


(24,471)


212,731













Stock-based compensation

9,736


6,229


406


8


4,773


21,152

Depreciation and amortization

36,890


16,839


5,064


1,251


3,391


63,435

Deferred acquisition consideration

4,856


5,905


4,608


?


?


15,369

Impairment and other losses

784


557


?


1,482


?


2,823

Other items, net (1)

1,515


2,510


116


22


2,797


6,960

Operating income (loss)

$      85,915


$      32,907


$                 22,974


$       (3,372)


$     (35,432)


$    102,992


(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Due to changes in the Company's internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments.

 

SCHEDULE 5
STAGWELL INC.
UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS
(amounts in thousands)


For the Three Months Ended June 30, 2021



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$    289,065


$    129,195


$                   52,328


$        9,623


$              ?


$    480,211

Billable costs

41,397


12,693


20,857


7


?


74,954

Revenue

330,462


141,888


73,185


9,630


?


555,165













Billable costs

41,397


12,693


20,857


7


?


74,954

Staff costs

178,093


86,377


33,478


5,093


9,527


312,568

Administrative costs

26,050


19,044


4,855


2,902


866


53,717

Unbillable and other costs, net

9,504


4,870


(560)


1,708


(132)


15,390

Adjusted EBITDA (1)

75,418


18,904


14,555


(80)


(10,261)


98,536













Stock-based compensation

6,132


71


181


?


554


6,938

Depreciation and amortization

7,200


7,430


1,587


499


1,669


18,385

Deferred acquisition consideration

7,529


75


106


?


?


7,710

Impairment and other losses

1


?


?


(1)


?


?

Other items, net (1)

1,924


1,935


259


?


4,310


8,428

Operating income (loss)

$      52,632


$        9,393


$                   12,422


$          (578)


$     (16,794)


$      57,075


(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Due to changes in the Company's internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments.

 

SCHEDULE 6
STAGWELL INC.
UNAUDITED PRO FORMA SEGMENT OPERATING RESULTS
(amounts in thousands)


For the Six Months Ended June 30, 2021



Integrated
Agencies
Network


Media
Network


Communications
Network


All Other


Corporate


Total

Net Revenue

$    543,371


$    250,277


$                  99,859


$      15,485


$              ?


$    908,992

Billable costs

73,257


23,972


37,764


7


?


135,000

Revenue

616,628


274,249


137,623


15,492


?


1,043,992













Billable costs

73,257


23,972


37,764


7


?


135,000

Staff costs

333,401


166,977


66,189


10,346


16,821


593,734

Administrative costs

50,123


36,649


9,693


6,746


2,410


105,621

Unbillable and other costs, net

22,504


13,088


(656)


386


13


35,335

Adjusted EBITDA (1)

137,343


33,563


24,633


(1,993)


(19,244)


174,302













Stock-based compensation

3,454


95


242


?


1,184


4,975

Depreciation and amortization

14,329


14,878


3,413


1,521


3,371


37,512

Deferred acquisition consideration

23,417


102


(188)


?


?


23,331

Impairment and other losses

875


?


?


?


?


875

Other items, net (1)

4,057


3,364


317


?


9,115


16,853

Operating income (loss)

$      91,211


$      15,124


$                  20,849


$       (3,514)


$     (32,914)


$      90,756


(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA, Other items, net and Pro Forma adjusted EBITDA.


Note: Due to changes in the Company's internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments.

 

SCHEDULE 7
STAGWELL INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)



June 30, 2022


December 31, 2021





ASSETS




Current Assets




Cash and cash equivalents

$               93,402


$                  184,009

Accounts receivable, net

782,927


696,937

Expenditures billable to clients

43,583


63,065

Other current assets

73,251


61,830

Total Current Assets

993,163


1,005,841

Fixed assets, net

123,662


118,603

Right-of-use lease assets - operating leases

299,553


311,654

Goodwill

1,668,892


1,652,723

Other intangible assets, net

904,812


937,695

Other assets

34,936


29,064

Total Assets

$          4,025,018


$               4,055,580

LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY




Current Liabilities




Accounts payable

$             254,650


$                  271,769

Accrued media

195,939


237,794

Accruals and other liabilities

222,699


272,533

Advance billings

316,654


361,885

Current portion of lease liabilities - operating leases

68,785


72,255

Current portion of deferred acquisition consideration

76,661


77,946

Total Current Liabilities

1,135,388


1,294,182

Long-term debt

1,381,560


1,191,601

Long-term portion of deferred acquisition consideration

119,853


144,423

Long-term lease liabilities - operating leases

327,677


342,730

Deferred tax liabilities, net

80,311


103,093

Other liabilities

73,148


57,147

Total Liabilities

3,117,937


3,133,176

Redeemable Noncontrolling Interests

49,697


43,364

Commitments, Contingencies and Guarantees




Shareholders' Equity:




Common shares - Class A & B

135


118

Common shares - Class C

2


2

Paid-in capital

368,345


382,893

Retained earnings (loss)

10,268


(6,982)

Accumulated other comprehensive loss

(34,451)


(5,278)

Stagwell Inc. Shareholders' Equity

344,299


370,753

Noncontrolling interests

513,085


508,287

Total Shareholders' Equity

857,384


879,040

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity

$          4,025,018


$               4,055,580

 

SCHEDULE 8
STAGWELL INC.
UNAUDITED SUMMARY CASH FLOW DATA
(amounts in thousands)



Six Months Ended June 30,


2022


2021

Cash flows from operating activities:




Net income

$                   58,141


$                   23,261

Adjustments to reconcile net income to cash (used in) provided by operating activities:




Stock-based compensation

21,152


?

Depreciation and amortization

63,435


21,331

Impairment and other losses

2,823


?

Provision for bad debt expense

1,641


381

Deferred income taxes

(1,325)


138

Adjustment to deferred acquisition consideration

15,390


2,359

Transaction costs contributed by Stagwell Media LP

?


5,042

Other

(6,059)


952

Changes in working capital:




Accounts receivable

(78,342)


28,960

Expenditures billable to clients

20,386


(4,752)

Other assets

(8,555)


(676)

Accounts payable

(33,228)


(40,344)

Accrued expenses and other liabilities

(109,232)


(1,037)

Advance billings

(46,391)


3,603

Deferred acquisition related payments

(7,107)


?

Net cash (used in) provided by operating activities

(107,271)


39,218

Cash flows from investing activities:




Capital expenditures

(14,467)


(7,288)

Current period acquisitions, net of cash acquired

(38,326)


?

Other

(2,144)


?

Net cash used in investing activities

(54,937)


(7,288)

Cash flows from financing activities:




Repayment of borrowings under revolving credit facility

(473,000)


(25,496)

Proceeds from borrowings under revolving credit facility

660,500


10,000

Shares acquired and cancelled

(14,926)


?

Distributions to noncontrolling interests and other

(36,498)


?

Payment of deferred consideration

(52,431)


?

Purchase of noncontrolling interest

(3,600)


?

Distributions

?


(37,214)

Repurchase of Common Stock

(14,839)


?

Net cash provided by (used in) financing activities

65,206


(52,710)

Effect of exchange rate changes on cash and cash equivalents

6,395


1,773

Net decrease in cash and cash equivalents

(90,607)


(19,007)

Cash and cash equivalents at beginning of period

184,009


92,457

Cash and cash equivalents at end of period

$                   93,402


$                   73,450

 

SOURCE Stagwell Inc.


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Following 16 offshore campaigns by NORI to define the nodule resource and establish an environmental baseline in exploration area NORI-D in the Clarion Clipperton Zone (CCZ), NORI's environmental program enters a new phase? monitoring the...

at 08:00
Monopar Therapeutics Inc. , a clinical-stage biopharmaceutical company focused on developing proprietary therapeutics designed to extend life or improve the quality of life for cancer patients, today announced an update on its actively enrolling...

at 07:31
A daily intake of a new dietary supplement (Nasafytol®) containing an oral combination of Quercetin (65 mg), Curcumin (42 mg) and Vitamin D3 (2.2 µg) for 14 days by early-stage mild to moderately symptomatic COVID-19 outpatients, resulted in more...

at 07:30
Salona Global Medical Device Corporation ("SGMD", "Salona Global" or the ??"Company") , ?an acquisition-oriented medical device company serving the global injury and surgery recovery (known as recovery science) market, today provided an update on the...

at 07:30
Endo International plc  announced today the launch of its new branded video series, Coffee & Cords, which aims to educate people about Dupuytren's...

at 07:30
Numinus Wellness Inc. ("Numinus" or the "Company") , a mental health care company advancing innovative treatments and safe, evidence-based psychedelic-assisted therapies, today announced that its research division, Numinus Bioscience, has developed...



News published on 4 august 2022 at 07:00 and distributed by: